Alcoa (AA) AI Stock Analysis

• Market Cap: $9.66B
• Dividend Yield: 1.07%
• Average Volume (3M): 7.68M
• Price to Earnings (P/E): 8.5
• Beta (1Y): 1.74
• Revenue Growth: 20.08%
• EPS Growth: N/A
• Country: US
• Employees: 13,900
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Aluminum
• EPS (TTM): -0.02
• Shares Outstanding: 258,964,020
• 10 Day Avg. Volume: 6,309,441
• 30 Day Avg. Volume: 7,682,244
• PEG Ratio: -1.24
• Price to Book (P/B): 1.56
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 191.08
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 0.73
• Enterprise Value/Gross Profit: 4.30
• Enterprise Value/Ebitda: 4.50
• 1Y Price Target: $39.13
• Price Target Upside: 4.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 4.05
• Revenue Forecast (FY): $12.65B

• Rating: 72 Outperform
• Price Target: $39.00 ▲(4.06% Upside)

Alcoa's overall stock score reflects a strong financial recovery and attractive valuation, supported by strategic investments and operational improvements. However, technical indicators suggest potential oversold conditions, and challenges such as increased tariff costs and operational risks temper the outlook. The balanced sentiment from the earnings call underscores both achievements and ongoing challenges.

Positive Factors

Operational Efficiency

The new energy contract and investment in Massena operations enhance Alcoa's operational efficiency, reducing costs and improving sustainability.

Strategic Investments

The development of a gallium plant strengthens Alcoa's position in the critical mineral supply chain, supporting long-term growth and diversification.

Revenue Growth

Increased revenue in the Aluminum segment indicates strong demand and pricing power, contributing to Alcoa's stable revenue growth trajectory.

Negative Factors

Revenue Decline

The sequential revenue decline reflects challenges in maintaining growth momentum, potentially impacting future profitability if not addressed.

Increased Tariff Costs

Rising tariff costs strain profitability, reducing margins and impacting Alcoa's competitive position in the U.S. market.

Workplace Safety

Safety incidents can disrupt operations and lead to increased regulatory scrutiny, affecting Alcoa's operational stability and reputation.

Alcoa Business Overview & Revenue Model

Company Description

Alcoa Corporation (NYSE: AA) is a global leader in the production of aluminum, operating across the entire aluminum value chain from mining and refining bauxite to manufacturing and recycling aluminum products. The company is primarily involved in the production of aluminum and alumina, with operations spanning several regions worldwide, including North America, South America, Europe, and Australia. Alcoa operates in various sectors such as aerospace, automotive, building and construction, commercial transportation, and packaging, providing a range of products including rolled and extruded aluminum, as well as engineered products and solutions.

How the Company Makes Money

Alcoa generates revenue primarily through the sale of aluminum and alumina, with its revenue model primarily based on the production and distribution of these core products. Key revenue streams include the sale of primary aluminum, alumina, and fabricated aluminum products, as well as aluminum recycling services. The company benefits from long-term contracts with major customers in the aerospace and automotive industries, which provide stable revenue sources. Additionally, Alcoa's operational efficiency and focus on cost management contribute to its profitability. The company also engages in strategic partnerships and joint ventures that enhance its market reach and operational capabilities, further contributing to its earnings.

Alcoa Financial Statement Overview

Summary

Alcoa's financial performance reflects a strong recovery with improved profitability and cash flow. The income statement shows increased revenue and margins, while the balance sheet indicates moderate leverage and effective equity utilization. However, historical fluctuations in financial metrics pose potential risks.

Income Statement

Alcoa's income statement shows a strong recovery with a notable increase in revenue and profitability in the TTM period. The gross profit margin improved to 16.75% from 12.29% in the previous year, and the net profit margin increased significantly to 8.58% from 0.49%. The EBIT and EBITDA margins also saw substantial improvements, indicating enhanced operational efficiency. Revenue growth is positive at 1.26% TTM, reflecting a stable upward trend. However, the company experienced fluctuations in past years, which could pose a risk if market conditions change.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.41, indicating moderate leverage. Return on equity improved significantly to 19.55% TTM, showcasing effective use of equity to generate profits. The equity ratio remains healthy, suggesting a strong capital structure. However, past fluctuations in equity and debt levels highlight potential risks if not managed carefully.

Cash Flow

Alcoa's cash flow statement shows a positive trend with a free cash flow growth rate of 11.86% TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.36, reflecting efficient conversion of earnings into cash. The free cash flow to net income ratio is 0.53, suggesting a solid cash position relative to profits. Despite these strengths, historical volatility in cash flow metrics suggests the need for cautious cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.26B	12.18B	10.71B	12.76B	12.44B	9.37B
Gross Profit	2.24B	1.50B	241.00M	1.93B	2.62B	765.00M
EBITDA	2.14B	1.09B	155.00M	1.43B	2.06B	972.00M
Net Income	1.15B	60.00M	-651.00M	-123.00M	429.00M	-170.00M
Balance Sheet
Total Assets	15.97B	14.06B	14.15B	14.76B	15.03B	14.86B
Cash, Cash Equivalents and Short-Term Investments	1.49B	1.14B	944.00M	1.36B	1.81B	1.61B
Total Debt	5.16B	2.82B	1.97B	1.87B	1.87B	2.62B
Total Liabilities	9.54B	8.91B	8.31B	8.17B	8.74B	9.84B
Stockholders Equity	6.34B	5.16B	4.25B	5.08B	4.67B	3.31B
Cash Flow
Free Cash Flow	651.00M	42.00M	-440.00M	342.00M	530.00M	41.00M
Operating Cash Flow	1.23B	622.00M	91.00M	822.00M	920.00M	394.00M
Investing Cash Flow	-425.00M	-608.00M	-585.00M	-495.00M	565.00M	-167.00M
Financing Cash Flow	-449.00M	201.00M	57.00M	-768.00M	-1.16B	514.00M

Alcoa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 37.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AA, the sentiment is Positive. The current price of 37.48 is below the 20-day moving average (MA) of 37.48, above the 50-day MA of 34.92, and above the 200-day MA of 31.17, indicating a neutral trend. The MACD of 0.63 indicates Positive momentum. The RSI at 53.15 is Neutral, neither overbought nor oversold. The STOCH value of 58.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AA.

Alcoa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KALU	74 Outperform	$1.54B	17.21	12.41%	3.30%	7.69%	91.86%
AA	72 Outperform	$9.66B	8.48	19.77%	1.07%	20.08%	―
HL	72 Outperform	$9.30B	45.72	8.88%	0.21%	45.61%	―
CMC	70 Neutral	$6.52B	79.19	1.99%	1.22%	-1.61%	-81.36%
CSTM	64 Neutral	$2.24B	20.10	12.22%	―	8.48%	12.10%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
CENX	59 Neutral	$3.08B	40.46	12.22%	―	20.15%	-72.89%

Alcoa Corporate Events

Alcoa’s Earnings Call: Balancing Achievements and Challenges

Alcoa Corporation’s recent earnings call presented a balanced sentiment, reflecting both the company’s strategic advancements and the challenges it faces. While Alcoa celebrated record aluminum production and investments in energy efficiency, these achievements were offset by concerns such as a workplace fatality, revenue declines, and increased tariff costs. The financial results were mixed, with an adjusted net loss reported, highlighting the dual nature of the company’s current standing.

Alcoa Reports Strong Q3 2025 with Strategic Moves

Alcoa Corporation is a leading global producer of bauxite, alumina, and aluminum products, known for its commitment to operational excellence and sustainability in the metals industry. In its third-quarter 2025 earnings report, Alcoa Corporation announced increased production in its alumina and aluminum segments, alongside significant one-time financial impacts due to strategic restructuring and asset sales. The company reported a net income of $232 million, driven by a substantial gain from the sale of its interest in a joint venture with the Saudi Arabian Mining Company, offset by restructuring charges from the closure of its Kwinana refinery in Australia. Alcoa also set production records at several smelters and secured a new energy contract for its Massena smelter in New York, reflecting its strategic focus on operational stability and portfolio optimization. Looking ahead, Alcoa’s management remains focused on enhancing profitability through safety and continuous improvement initiatives, while advancing mine approvals in Australia and exploring new opportunities in the gallium market.

Alcoa Announces Permanent Closure of Kwinana Refinery

On September 29, 2025, Alcoa Corporation announced the permanent closure of its Kwinana alumina refinery in Western Australia, which had been fully curtailed since June 2024. The decision was influenced by factors such as the refinery’s age, operating costs, and market conditions. The closure will result in restructuring charges of approximately $890 million, with cash outlays expected to reach $600 million over six years. The refinery’s closure will impact approximately 220 employees, with severance costs previously recorded in 2024.

The most recent analyst rating on (AA) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on Alcoa stock, see the AA Stock Forecast page.